Identifying Chart Patterns

This chapter focuses on the identification of chart patterns on a stock's price chart and shows what they mean and how to trade them. Technical analysis, like price and volume patterns, moving average, and chart pattern identification gives one insight about when the market is ready to react to these fundamentals. Very often, the price action on a chart can form meaningful patterns. These chart patterns reflect the collective buying and selling sentiment of the market and can, in turn, be used in trying to forecast future price direction and the timing surrounding it. Keep in mind that nothing is fool proof. But a strong fundamental outlook combined with a good technical viewpoint creates a very potent combination for the trader and investor.